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Timbercorp Announcement

  1. zwu
    2,418 Posts.
    lightbulb Created with Sketch. 9
    29/05/2002 12:24:53
    Adds to Tax Revenue & Regional Economy

    TIMBERCORP LIMITED 2002-05-29 ASX-SIGNAL-G

    HOMEX - Melbourne

    +++++++++++++++++++++++++
    Eucalypt, olive and almond plantations developed by Timbercorp
    Limited are producing significant Government tax revenue and benefits
    to Australia's regional economy, according to an analysis by Access
    Economics released today.

    Timbercorp, Australia's largest agribusiness investment manager,
    commissioned Access to report on the economic impact of the company's
    operations.

    "We wanted a demonstrably independent and authoritative analyst to
    define for government, investment markets and the general public what
    we believed to be true," Timbercorp chief executive Mr Robert Hance
    said.

    "The Access examination, importantly, confirms that the money
    investors subscribe to Timbercorp prospectuses goes into the ground
    and is being managed for the long term to produce returns from sales
    ofwoodchips, olive oil and almonds.

    "Properly managed, tax-effective investment, as offered by
    Timbercorp, is an effective method of financing large-scale
    agricultural development by transferring largely city-based funds to
    rural areas and, far from being a drag on tax revenues, such
    investment over time has a substantial positive impact."

    Key findings of the Access report include:

    * From 2007 onwards, about 10 million tonnes of woodchips from
    Timbercorp's more than 40,000 hectares of plantations in the Green
    Triangle region of South-west Victoria/south-east South Australia are
    projected to have an export value of more than $800 million. Total
    expenditure on harvesting, processing and transport may total well
    over $400 million at today's prices. The balance of Timbercorp's
    25,000 ha plantation estate in Western Australia will have a similar
    impact.

    * At maturity, the olive grove at Boort in central Victoria is
    projected to make direct contributions of nearly $50 million annually
    to GDP and around $80 million to Australia's trade balance. In
    addition, the project's expenditures will be supporting employment
    and providing business opportunities in the Loddon-Murray region.

    * Sustainable timber plantations are more labour-intensive than many
    other land uses and there is comparatively high unemployment and
    underutilisation of labour in regional Australia. The olive grove is
    situated in an area with high structural unemployment and uses land
    that had less value in its alternative use.

    * Investment in long-lived agribusiness projects is more likely to
    provide a positive economic return if a high proportion of investors'
    funds is used to establish and operate the business. Over the four
    years to 30 June 2001, Timbercorp has spent on the purchase of
    assets, plantation establishment and operation, the equivalent of all
    the funds raised from investors.

    * Grower expenditures incurred in advance of assessable income that
    are immediately deductible to growers are immediately assessable as
    income for Timbercorp.

    * The net present value (NPV) of tax revenue generated from the
    eucalypt estate over an 11-year rotation is estimated to total $189
    million ($2,520/ha). NPV of tax revenue at maturity of the olive
    grove over the 24-year horizon is estimated at $249.6 million
    ($71,310/ha).

    Mr Hance said the Access report represented a valuable addition to
    the debate on thevalue of agribusiness tax-effective investment - a
    debate notable for heat, controversy and a paucity of objective
    economic analysis.

    "We believe this work will show that blanket criticism of this method
    of funding agricultural investment is unjustified. The debate really
    should be about the effectiveness of management and grower returns,"
    Mr Hance said.

    "Timbercorp is happy to be assessed on that basis".

    For further information, contact:

    Robert Hance, Chief Executive Officer, Timbercorp
    Telephone: (03) 8615 1200 or 0417 887 551

    Sol Rabinowicz, Executive Director, Timbercorp
    Telephone: (03) 8615 1200 or 0417 887 552

    Or refer to the Timbercorp website: www.timbercorp.com.au for a full
    copy of the report.



 
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